Identity Economics provides an important and
compelling new way to understand human behavior, revealing how our identities--and not
just economic incentives--influence our decisions. In 1995, economist Rachel Kranton wrote
future Nobel Prize-winner George Akerlof a letter insisting that his most recent paper was
wrong. Identity, she argued, was the missing element that would help to explain why
people--facing the same economic circumstances--would make different choices. This was the
beginning of a fourteen-year collaboration--and of Identity Economics.
The authors explain how our conception of who we are
and who we want to be may shape our economic lives more than any other factor, affecting
how hard we work, and how we learn, spend, and save. Identity economics is a new way to
understand people's decisions--at work, at school, and at home. With it, we can better
appreciate why incentives like stock options work or don't; why some schools succeed and
others don't; why some cities and towns don't invest in their futures--and much, much
more.
Identity Economics bridges a critical gap in the
social sciences. It brings identity and norms to economics. People's notions of what is
proper, and what is forbidden, and for whom, are fundamental to how hard they work, and
how they learn, spend, and save. Thus people's identity--their conception of who they are,
and of who they choose to be--may be the most important factor affecting their economic
lives. And the limits placed by society on people's identity can also be crucial
determinants of their economic well-being.
George A. Akerlof, winner of the 2001 Nobel Prize in Economics, is the
Koshland Professor of Economics at the University of California, Berkeley. He is the
coauthor, with Robert Shiller, of "Animal Spirits: How Human Psychology Drives the
Economy", and "Why It Matters for Global Capitalism" (Princeton). Rachel E.
Kranton is professor of economics at Duke University.
Table of Contents
PART ONE: Economics and Identity
CHAPTER ONE: Introduction 3
CHAPTER TWO: Identity Economics 9
CHAPTER THREE: Identity and Norms in Utility 17
POSTSCRIPT TO CHAPTER THREE A Rosetta Stone 21
CHAPTER FOUR: Where We Fit into Today's Economics 27
PART TWO: Work and School
CHAPTER FIVE: Identity and the Economics of
Organizations 39
CHAPTER SIX: Identity and the Economics of Education 61
PART THREE: Gender and Race
CHAPTER SEVEN: Gender and Work 83
CHAPTER EIGHT: Race and Minority Poverty 97
PART FOUR: Looking Ahead
CHAPTER NINE: Identity Economics and
Economic Methodology 113
CHAPTER TEN: Conclusion, and Five Ways Identity Changes Economics 121
Acknowledgments 131
Notes 135
References 153
Index 173
192 pages, Paperback